Ask The Get Out of Debt Experts

I Really Screwed Up And Need Some Direction. – Chris

“Dear Steve,

Poor, Poor, Poor money management!! I need some direction on what to do. I am terrified of bankruptcy, and want to do anything to avoid it. I have read a number of things on your web site, which I truley appreciate, and you have talked about the failure rate of so many people who try debt management programs, but you never explain why so many people fail. I want to get out of debt, I want this massive monkey off my back, and I am just looking for some real advise that I can beleive in. Would love any kind of feedback.



Dear Chris,

Debt management fails because the extended repayment plan is not based on what is reasonable, affordable or sustainable for you. It is based on what the creditors want, which is just about the same each month as you are paying now. But if you could make that payment, you’d do that now.

Creditors want to see your budget that the debt management company will create for you and creditors don’t like to see that you are saving money in an emergency fund instead of forking over everything you can each month.

Because the repayment plan does not include a savings component all it takes is one unexpected big expense to throw you off track.

The ultimate issue here is that I feel like you are trying to bargain for a solution that you want on an emotional level, and not a solution that is best suited to your situation.

What I hear you saying is that you don’t like bankruptcy, for whatever reason, but that you’ve also discounted it as a possible solution based on your biases about what bankruptcy means to you.

Making an appointment to go in and talk to a bankruptcy attorney is free, asking all your questions is free, learning if bankruptcy is an appropriate solution for you is free. The only thing you will walk out of that appointment with the bankruptcy attorney is knowing the facts and be better informed to make a decision that is best for you.

READ  Credit Counseling and Debt Management Information Request

I’m not telling you or suggesting that you go and do anything you don’t want to do. I’m simply suggesting, urging, that you get the facts first before you start erasing possible solutions.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • Hello Chris,  I know you asked this question more than a year ago.  So, I hope your debt issue has been resolved successfully by now, but if not, maybe I can help.  

    The one and only reason your debt management plan, or any debt elimination strategy fails is because the payment was not affordable.  Affordable means that your income is sufficient to provide all your living expenses plus your debt payment with an absolute minimum of $100 per month left over, preferably $250 left over.    Your debt payment plan did not leave enough money to pay your living expenses and lifestyle spending. That is why it failed. This is not rocket science.

    Here is exactly what you need to do.  Determine your net monthly take home pay.  Subtract all living expenses (including periodic expenses that are paid bi-annually or annually like insurance and car registrations).  What ever amount remains, less the absolutely necessary surplus $100 – $250/month is the amount you have available to pay towards your debt.  

    The next step is to determine which debt tool allows you to eliminate your debt with the payment that is affordable.  Virtually every debt counselor offers a free consultation and just one tool to implement.  All want your business, all know you want to avoid bankruptcy and the lowest possible payment and many will tell you what you want to hear in order to get your business very simply because that is how they are paid.  Many will stretch the payment out to an unreasonable amount of time to lower the monthly payment.  The longer the payment plan, the less likely it is to be successful.  Be very careful.

    The fact is that the biggest mistake people make is they try to avoid bankruptcy when BK is their best and in many cases the only viable option people have for dealing successfully with their debt.  Also be aware that BK attorneys, just like CCCs and debt settlement companies are paid only if you choose their service and only about 30% of chapter 13 BK filers complete the 3 or 5 year payment plan and successfully eliminate their debt.  This is a miserable success rate.  Why, once again, because the payment was not affordable. 

    You may have to sacrifice spending or lifestyle to make a debt payment strategy work.  The bottom line is that you and you alone are responsible for your choices and the result of those choices. If your payment plan does not fit within your budget with funds left over at the end of the month, you will fail – guaranteed. If your payment plan does fit with your budget, you will succeed, guaranteed.  Once debt is eliminated, you can then create the cash reserve and emergency funds you need to eliminate the need to borrow from credit cards.  After that you can begin saving for your future with tax qualified funds.  

    The difference between sending your money to the bank for debt payments and sending your money to the bank for savings and investments can easily be a million dollars or more by the time you retire.  Good luck, hope this helps. 

Leave a Comment

Scroll to Top